Offences under Income Tax Act and Penalty Applicable

An assessee who contravene any provision of Income Tax Act, 1961 will be liable to pay the penalty. The penalty will be added to levied amount and will be different from the tax which is payable. Penalty will be levied to the assessee who commits the offences and will be imposed as per the law which is applicable at the time of the offence committed.

There are following penalties for the various offences:

SECTION158BFA:

Offence:

Calculation of income which is undisclosed for the block period, when under section 132 any search is initiated or for any books of account or any other document or any asset can be seized under section 132A, in the case of any person.

Penalty: 

Minimum penalty in the above case will be 100% of the tax which is leviable regards to the undisclosed income which can be increased to maximum of 300% of the tax which is leviable regards to the undisclosed income.

SECTION 221(1):

Offence:

If the assessee has made any default in making tax payment.

Penalty:

Amount of penalty will be directed by the assessing officer. Though, the amount of penalty cannot more than the arrears of payment.

SECTION 234E:

Offence:

An assessee failed to file the return regards to TDS/TCS within the time specified under Section 200(3) and 206C (3).

Penalty:

The penalty under this section will be Rs 200 for each day of default.

SECTION 234F:

Offence:

An assessee made default in filing the return which is under section 139(1) within the prescribed limit. 

Penalty:

If the assessee has filed the return before 31st December for the relevant assessment year then the penalty will be Rs 5,000. And in any other case it will be Rs 10,000. Though, if the income of the assessee is less than Rs 5 Lakhs then penalty shall not be more than Rs 1,000.

SECTION 207A:

Offence:

In this section there can be two cases which are: if an assessee has made under-report of his income and second is an assessee has made under-report for misreporting of income.

Penalty: 

In first case the penalty will be 50% of the amount of payable tax which is upon the under-reported income. In second case the penalty will be 200% of the amount of payable tax which is upon the under-reported income.

SECTION 271(1) (b):

Offence:

If an assessee fails to file the return or fails to give response on notice then he shall be punishable under this section. However, this section is applicable up to Assessment Year 2016-2017.

Penalty:

The penalty shall be under this section is Rs 10,000 for each failure.

SECTION 271(1) (c):

Offence:

Hiding of any particulars of his income or benefits or he furnished inexact particulars of his income or benefits. However, this section is applicable up to Assessment Year 2016-2017.

Penalty:

Minimum penalty under this section is 100% of such tax which is avoided and maximum it can be 300% of such tax which is avoided.

SECTION 271(1) (4):

Offence:

Distribution of any income by a firm which is registered and it is not according to the deed of partnership and because of that the partner returns his income which is below the real amount. However, this section is applicable up to Assessment Year 2016-2017.

Penalty:

Penalty under this section is maximum of 150% of the tax which is evaded.

SECTION 271A:

Offence:

Failure to keep or maintain or hold on the documents or books of accounts which necessary under section 44AA.

Penalty:

This will lead the penalty of Rs 25,000.

SECTION 271AA (2):

Offence:

Fails to furnish the information or any documents to the authority which is necessary under section 92D (4).

Penalty:

This will lead the penalty of Rs 5,00, 000.

Author- Adv.Shivam Kumar
Legel and content Executive, Taxblock India Pvt. Ltd